America’s 250th birthday is an occasion for introspection. But as we examine and reflect upon our glories and our shortcomings, one element of our national character is rarely mentioned: the American spirit of free enterprise. That’s unfortunate, because it should be.
On July 4, 1776, the Founding Fathers were probably too distracted to notice the publication in London just three months earlier of a book entitled The Wealth of Nations. Authored by a Scottish economist and moral philosopher named Adam Smith, the book laid out the case for an entrepreneurial society with an economy governed by the “invisible hand” of market forces. The Revolution itself was a rejection of the British government’s attempt to regulate and control colonial commerce. As the ripple effects of the book crossed the Atlantic and lapped onto our shores, Adam Smith’s ideas were embraced by the new nation.
Thomas Jefferson called The Wealth of Nations “the best book extant” on political economy. James Madison studied the book extensively and nominated it for inclusion in the proposed congressional library. Alexander Hamilton, who disagreed with Jefferson and Madison on many domestic issues, nevertheless absorbed Smith’s teachings. Ron Chernow, Hamilton’s biographer, notes that his Report on Manufactures “displays an intimate familiarity” with the book.
What united the often disputatious Founding Fathers, and led them to welcome Smith’s work, was their shared idea of a thriving, dynamic future economy, powered by upwardly mobile citizens, one that would radically diverge from the static, stratified systems of Europe.
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